EARNINGS PRESENTATION

Q4 2020

Forward Looking Statements

This presentation has been prepared by Volt Information Sciences, Inc. (the "Company") for investors, solely for informational purposes. It contains certain forward-looking statements, which may be identified by the use of forward-looking terminology, including the terms "may," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or, in each case, their negative, or other variations or comparable terminology. The forward-looking statements involve risks and uncertainties, some of which cannot be predicted or quantified. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. The Company derives many of its forward-looking statements from its operating budgets and forecasts, which are based upon detailed assumptions. While the Company believes that its assumptions are reasonable, it is difficult to predict the impact of known factors and to anticipate all factors that could affect actual results. As such, actual results may differ materially from those projected or implied and you should not place undue reliance on these forward-looking statements. For a discussion concerning the factors that could cause these differences, please refer to the Company's filings with the Securities and Exchange Commission and on its website at www.volt.com.

This presentation makes no representations or warranties, and no person has been authorized to make any representations on behalf of the Company or any of its affiliates, or to give any information other than that contained in this presentation. Nothing contained in this presentation is, or shall be relied upon as, a promise or representation, whether as to the past, present or the future. Certain of the economic and market information contained herein has been obtained from published sources and/or prepared by other parties. None of the Company or any of its directors, partners, stockholders, officers, affiliates, employees, agents or advisers nor any other person assumes any responsibility for the completeness of any information in this presentation, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which such statements are based. Prospective investors will be expected to have conducted their own due diligence investigation regarding all matters pertinent to investing in the Company.

This presentation includes certain non-GAAP financial measures. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please refer to the Appendix of this presentation for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.

This presentation is confidential and may not be reproduced or otherwise distributed or disseminated, in whole or part, without the prior written consent of the Company, which consent may be withheld in its sole and absolute discretion.

Any investment in the Company will be subject to certain risks related to the nature of the Company's business and the structure and operations of the Company. Any investment in the Company should be made only with an appreciation of the applicable risks, which are described in the Company's filings with the SEC and on its website at www.volt.com.

2

Adapting to COVID - 19

Response

Created Internal "Task Force"

Transitioned to "Work From Home" Model

Remote Screening, Interviewing and Onboarding of Candidates

Guided and Coached Clients on Protocols to Keep Facilities Open

Bi-weeklyCompany-wide Calls and Frequent Communication with Field Employees and Clients

Resiliency

80% of Client Portfolio Deemed "Essential"

Better-than-Industry Revenue Performance

Captured New COVID-related and Non- COVID Business Wins

Proactive SG&A Reductions

Recovery

Sequential Monthly Revenue and

Order Improvement

Streamlined Operations

New and Strengthened Customer

Relationships

Improved Financials

3

Financial Summary - Fiscal 2020

(Dollars in millions)

Q1

Q2

Q3

Q4

YTD

Adjusted Revenue

$

217.8

$

207.3

$

185.9

$

211.1

$

822.1

Gross Margin

14.4%

15.6%

16.1%

16.2%

15.6%

Adjusted Selling, Administrative and Other

Operating Costs

$

39.5

$

36.2

$

31.3

$

30.7

$

137.7

Adjusted Operating Income (Loss)

$

(9.3)

$

(4.4)

$

(4.2)

$

(11.5)

$

(29.4)

Excluding Restructuring and Impairment

$

(8.1)

$

(4.0)

$

(1.3)

$

3.5

$

(9.8)

Adjusted EBITDA

$

(5.6)

$

(1.4)

$

1.0

$

5.9

$

(0.1)

Working Days

59

65

63

64

251

Average Daily Revenue

$

3.7

$

3.2

$

3.0

$

3.3

$

3.3

Q1

  • Seasonal lower margins due to reset of payroll taxes and holiday closures
  • Cost savings though Project Momentum begins end of quarter

Q2

  • COVID-19shutdowns begin to impact revenue mid-quarter
  • Additional cost management actions in response to COVID-19

Q3

  • Revenue begins to rebound as customers return to work and business expands
  • Consolidation and exit of offices result in $2.4M impairment charge

Q4

  • Continued sequential revenue growth from existing and new clients
  • Consolidation of real estate footprint at Orange CA campus results in $14.5M impairment charge

See appendix for reconciliation of Adjusted Revenue, Adjusted Selling, Administrative and Other Operating Costs and Adjusted Operating Income (Loss)

4

Adjusted Average Daily Revenue Trend

  • The impact of COVID-19 began in March 2020 and we continued to experience year over year consolidated average daily revenue declines through May 2020.
  • Beginning in June 2020, consolidated revenue increased sequentially month over month as a result of a combination of existing customers returning to work, expanding business with existing clients and winning new customers.

5

FY20 Segment Results

North American

International

North American

(Dollars in millons)

Staffing

Staffing

MSP

Adjusted Revenue

$689.1

$95.3

$37.9

YOY change

-13.9%

-15.1%

-1.4%

Gross Margin

14.9%

17.0%

22.3%

YOY change

20 bps

50 bps

-510 bps

Adjusted Operating Income,

excluding Restructuring and

Impairment

$17.1

$1.7

$3.1

% of Adjusted Revenue

2.5%

1.8%

8.1%

See appendix for reconciliation of Adjusted Revenue and Adjusted Operating Income (Loss)

6

Adjusted Selling, Administrative and Other Operating Costs

• 14 consecutive quarters of reduction when compared yoy

• In 2020, implemented phases 1- 3 of strategic cost reductions

• Continue to actively pursue further options to increase financial flexibility.

See appendix for reconciliation of Adjusted Selling, Administrative and Other Operating Costs

7

4th Quarter Highlights

Revenue

+

Improving

+

Manage

=

3% Adjusted

Growth

Gross Margin

SG&A Expense

EBITDA

Sequential Adjusted

Price increases offset

Adjusted Selling,

4th Quarter Adjusted

Revenue growth

lower direct hire

Administrative and

EBITDA improves

continues from a

revenue and pricing

Operating Costs

$1.M year over year

combination of

pressure due to COVID-

decline 17.5% year

expanding business

19 as well as non-

over year

FY20 Q4 Adjusted

with existing clients

recurring adjustments in

EBITDA 2.8%

and winning new

the prior year

customers

FY 2020 Annual

North America Staffing

Adjusted EBITDA 0%

COVID impact

margins flat year over

approx. $35M

year

See appendix for reconciliation of Adjusted Revenue and Adjusted Selling, Administrative and Other Operating Costs

8

Financial Summary

(Dollars in millions)

FY20 Q4

FY19 Q4

Change

Adjusted Revenue

$

211.1

$

237.2

11.0%

Gross Margin

16.2%

16.6%

40 bps

Adjusted Selling, Administrative and Other Operating Costs

$

30.7

$

37.3

17.5%

Adjusted Operating Income (Loss)

$

(11.5)

$

0.7

NA

Excluding Restructuring and Impairment

$

3.5

$

2.4

46.6%

Adjusted EBITDA

$

5.9

$

4.8

22.6%

Adjusted Revenue -11.0% compared to -18.4% last quarter.

Favorable YOY

See appendix for reconciliation of Adjusted Revenue, Adjusted Selling, Administrative and Other Operating Costs and Adjusted Operating Income (Loss)

Unfavorable YOY

9

Adjusted Revenue Monthly Trend

  • NA Staffing is the driver for our revenue recovery.
  • Beginning in June 2020, revenue increased sequentially month over month as a result of a combination of existing customers returning to work, expanding business with existing clients and winning new customers.

10

4th Quarter Gross Margin Bridge

  • North American Staffing Contract Revenue grew from approximately 80% of Consolidated Revenue in FY19 Q4 to approx. 82% in FY20 Q4
  • North American Direct Hire and Conversion Revenue margins were negatively impacted by COVID-19
  • International Staffing Revenue margins were negatively impacted by statutory legislation changes in the UK and COVID-19
  • North American MSP Managed Service Revenue margins declined due to one-timenon-recurring adjustments in prior year

11

Q4 FY20 Segment Results

North American

International

North American

(Dollars in millons)

Staffing

Staffing

MSP

Adjusted Revenue

$178.6

$23.0

$9.4

YOY change

-9.4%

-22.0%

-13.6%

Gross Margin

15.7%

17.6%

22.5%

YOY change

flat

-20 bps

-750 bps

Adjusted Operating Income,

excluding Restructuring and

Impairment

$9.1

$0.4

$0.9

% of Adjusted Revenue

5.1%

1.8%

9.5%

● Adjusted Revenue -9.4% vs.

● Adjusted Revenue -22.0% vs.

● Adjusted Revenue -13.6% vs.

-18.6% last quarter

-23.9% last quarter

-2.1% last quarter

● Gross Margin improved 30 bps

● Gross Margin declined 50 bps

● Gross Margin improved 70 bps

from FY20 Q3

from FY20 Q3

from FY20 Q3

See appendix for reconciliation of Adjusted Revenue and Adjusted Operating Income (Loss)

12

Select Balance Sheet Metrics

November 1,

November 3,

(In millons)

2020

2019

Cash & Cash Equivalents

$38.6

$28.7

Debt

$60.0

$55.0

Working Capital

$101.8

$89.4

Global Liquidity

$39.0

$42.2

November 1,

November 3,

(In millons)

2020

2019

Requirements under certain MSP contracts

$9.2

$9.3

DZ Financing Program

$8.2

-

Other

$0.5

$0.5

Restricted Cash

$17.9

$9.8

November 1,

November 3,

(In millons)

2020

2019

Capital Loss Carryforwards

-

$12.9

Federal Tax Credits

$54.7

$53.5

Net Operating Loss Carryforwards (Federal)

$212.0

$207.2

  • $26.2 million in payroll tax deferrals from calendar 2020 through CARES Act
    • 50% of amount due at end of calendar 2021, other 50% due at end of calendar 2022
    • Repayment to come from operating cash flow
  • Increase in restricted cash in fiscal 2020 due to supplemented collateral provided by accounts receivable towards the Company's aggregate borrowing base usage
  • Tax assets will help shelter future earnings and transaction gains

13

Capital Expenditure vs Depreciation Schedule

14

Path to Profitability

Revenue

+

Improving

+

Manage

=

3% Adjusted

Growth

Gross Margin

SG&A Expense

EBITDA

Expansion within

Pricing power for

Maintain

Target within

existing clients

contract

cost discipline

three years

New logo wins

renewals

Accelerating

Sales efforts

trend in FY2022

New markets

towards higher-

and FY2023

margin business

15

APPENDIX

Adjusted Revenue Reconciliation

(in thousands)

Three Months Ended

November 1, 2020

Three Months Ended November 3, 2019

MSP

As

As

FX

Business

14th

Delivery

Revenue

Reported

Reported

Impact

Exited

Week

Model Shift

Adjusted

North American Staffing

$

178,603

$

216,587

$

-

$

-

$

(15,770)

$

(3,591)

$

197,226

InternationalStaffing

23,033

30,574

1,175

-

(2,214)

-

29,535

North American MSP

9,365

11,659

-

-

(910)

89

10,838

Corporate

and Other

135

187

-

-

(11)

-

176

Eliminations

(63)

(599)

-

-

43

-

(556)

Total Revenue

$

211,073

$

258,408

$

1,175

$

-

$

(18,862)

$

(3,502)

$

237,219

% change

-11.0%

Year Ended

November 1, 2020

Year Ended November 3, 2019

MSP

As

FX

Business

53rd

Delivery

Revenue

Reported

As Reported

Impact

Exited

Week

Model Shift

Adjusted

North American Staffing

$

689,095

$

830,947

$

-

$

(692)

$

(15,770)

$

(14,426)

$

800,059

InternationalStaffing

95,308

114,377

78

-

(2,214)

-

112,241

North American MSP

37,915

39,010

-

-

(910)

363

38,463

Corporate

and Other

674

15,320

-

(14,593)

(11)

-

716

Eliminations

(937)

(2,564)

-

692

43

-

(1,829)

Total Revenue

$

822,055

$

997,090

$

78

$

(14,593)

$

(18,862)

$

(14,063)

$

949,650

% change

-13.4%

17

Adjusted Operating Income (Loss) Reconciliation

(in thousands)

Three Months Ended

November 1, 2020

As

Operating Income (Loss)

Reported

North American Staffing

$

8,956

InternationalStaffing

278

North American MSP

885

Corporate

and Other

(21,581)

Total Operating Income (Loss)

$

(11,462)

Three Months Ended November 3, 2019

As

Business

14th

Reported

Exited

Week

Adjusted

$

7,167

$

-

$

(759)

$

6,408

1,619

-

(220)

1,399

1,838

-

(224)

1,614

(9,691)

437

502

(8,752)

$

933

$

437

$

(701)

$

669

Year Ended

November 1, 2020

Year Ended November 3, 2019

As

As

Business

14th

Operating Income (Loss)

Reported

Reported

Exited

Week

Adjusted

North American Staffing

$

14,322

$

17,963

$

-

$

(759)

$

17,204

InternationalStaffing

1,399

2,893

19

(220)

2,692

North American MSP

3,074

5,023

-

(224)

4,799

Corporate

and Other

(48,164)

(35,712)

2,462

502

(32,748)

Total Operating Income (Loss)

$

(29,369)

$

(9,833)

$

2,481

$

(701)

$

(8,053)

18

Adjusted Operating Income (Loss) Reconciliation

Three Months Ended

November 1, 2020

Three Months Ended November 3, 2019

As

As

Business

14th

Operating Income (Loss)

Reported

Reported

Exited

Week

Adjusted

Gross Margin

$

34,229

$

42,959

$

-

$

(3,311)

$

39,648

Selling, administrative and other operating costs

30,735

39,908

(34)

(2,610)

37,264

Restructuring and severance costs

438

1,856

(403)

-

1,453

Impairment

charges

14,518

262

-

-

262

Total Operating income (Loss)

$

(11,462)

$

933

$

437

$

(701)

$

669

Year Ended

November 1, 2020

Year Ended November 3, 2019

As

As

Business

14th

Operating Income (Loss)

Reported

Reported

Exited

Week

Adjusted

Gross Margin

$

127,851

$

152,563

$

(523)

$

(3,311)

$

148,729

Selling, administrative and other operating costs

137,666

157,052

(569)

(2,610)

153,873

Restructuring and severance costs

2,641

4,656

(2,087)

-

2,569

Impairment

charges

16,913

688

(348)

-

340

Total Operating Income (Loss)

$

(29,369)

$

(9,833)

$

2,481

$

(701)

$

(8,053)

19

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Volt Information Sciences Inc. published this content on 13 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2021 22:57:00 UTC